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Trustee investment
Problem scenario
Steve and Jane are trustees of a £300,000 cash fund for the benefit of their sister Joanne for her life, remainder to her sons Mark and Peter. Joanne is a widow and her only source of income is the trust.
The trust instrument, dated 1st March 1998, states that the trustees are ‘subject to the default powers of investment for the time being permitted by the general law’.
Steve and Jane propose to purchase freehold premises for Joanne to live in. The freehold is valued at £50,000. They also propose to put aside £10,000 for investment in Chelsea porcelain figurines, because Jane collects these, and the remainder is to be put in a bank account.
Advise Steve and Jane as to the validity of the proposed investments.